China’s inflation hit a 17-month low of 4 percent last month, down from 4.6 percent the previous month, the government said yesterday.
The figure is the lowest since May last year, confirming a trend for weakening inflation in the world’s fourth-largest economy, as growth creation becomes more of a policy concern.
The consumer price data from the National Bureau of Statistics were released a day after China announced that wholesale prices — another inflation gauge — eased to 6.6 percent last month, down from 9.1 percent in September.
The significant fall in wholesale prices indicated a sharp drop in demand, said Zhang Xinfa, a Beijing-based economist with Galaxy Securities (中國銀河證券).
Food prices, the main factor in driving up consumer prices in China recently, rose 8.5 percent last month, down from 9.7 percent in September, the bureau said.
China began this year with inflation control at the top of its list of priorities, but with the trade surplus likely to shrink this year, economic growth has become the dominant policy objective in Beijing.
“The downtrend in inflation has allowed the government to take more aggressive monetary and fiscal action without stoking consumer prices,” JP Morgan’s Jing Ulrich said in a note.
China unveiled a US$586 billion stimulus package this week in the strongest indication yet that the government is concerned about the impact the global crisis has on domestic growth.
The fiscal stimulus was welcome news but it will take time for its effects to be felt, and in the meantime, both inflation and activity growth are expected to fall further, Goldman Sachs economist Yu Song (宋宇) said.
In the first 10 months of the year, China’s consumer price index (CPI) increased 6.7 percent from the same period last year.
China’s fourth-quarter CPI is likely to fall within Beijing’s target of 4.8 percent, but high inflation in the first half of the year means it is unlikely to meet its target for the whole year, Moody’s economist Sherman Chan (陳穎嘉) said.
“Nevertheless, slowing inflation gives the People’s Bank of China the green light to cut interest rates in coming months, helping to shore up the cooling economy,” she said.
In a separate news, more than 1,300 companies shut down, suspended operations or moved out of China’s Pearl River Delta in the first nine months of the year because of the global downturn, state press said yesterday.
The number is from the cities of Shenzhen and Dongguan only and the overall figure for all of Guangdong Province could be much larger, the China Daily said.
About 30 percent of overseas-invested firms in the delta region are losing money, the report said, citing Wu Jun, a senior official with the province’s foreign trade department.
Half of them just manage to break even and only 20 percent post a profit, he said.
Exports from the province rose by 13.5 percent in the first nine months, down from 24.2 percent in the same period last year, customs data showed.
The weakening exports have impacted the desire of foreign companies to invest in Guangdong and the local governments are now introducing new incentives to encourage investment, Wu said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts